Change For A Hundred?

By Evan Bernstein, on June 30th, 2008

I had to break a one hundred dollar bill at a store last night. I handed the note to the cashier, whom could not have been more than 17 years old. He proceeded to hold the bill up to the light, supposedly to look for the watermark and the reflective strip of filament that is embedded in the bill. As he was doing this, I knew immediately what was coming next, and sure enough, out came one of those pens (or “highlighter”, if you prefer) and he proceeded to mark the note with the pen. The pen dispenses an amber-colored ink. The idea is that if the ink turns from its yellow-tint in to black, it is an indicator that the bill might be counterfeit. So when he marked my bill, guess what happened to the yellow ink?

Before I answer what happened to me and my “hunj” (which is a very strange colloquialism for a one hundred dollar bill, apparently used primarily in the Connecticut backwoods), I want to delve into the science behind the pen and the notes that they divine as authentic or not. Lets start with The United States One Hundred Dollar Bill.

All U.S. paper currency is manufactured by Crane and Company of Dalton, Massachusetts. The “paper” is actually a unique fiber composed of 25 percent linen and 75 percent cotton. This material is referred to as “rag paper”. Red and blue synthetic fibers of various lengths are distributed evenly throughout the rag paper. Before World War One, these fibers were made of silk. There are numerous features of the bill designed to identify counterfeits from legitimate tender. The watermark is created during the paper-making process, and can be viewed from either side of the bill when held up to the light. The watermark is extremely difficult for counterfeiters to duplicate, even with the most sophisticated equipment. The notes also included micro-printing (small lettering that is hard to replicate); on the face of the note, “USA 100” is within the number in the lower left corner and “United States of America” appears as a line in the left lapel of Benjamin Franklin’s coat. Another innovative feature of the newest generation of American currency is the use of color-shifting ink. The ink is used in the numeral in the lower right-hand corner on the front of the bill. The “color-shifting” ink makes the numeral look green when viewed straight on, but black when viewed at an angle. Embedded in the paper, a plastic security strip runs vertically up one side of the note. Viewing the obverse (the front side) of the note, the plastic strip is on the left side. Upon close inspection of this security strip, you can see the words “USA 100″ repeated along the thread, visible on both sides of the bill. And later this year, a new security feature is being added to the next redesign: 650,000 microlenses to make the image of Ben Franklin move when the bill is turned. Turning the bill up and down will make Ben’s face move left and right. Turning the bill left and right will make Ben’s face move up and down.

Now lets take a look at the counterfiet detecting wonderpen. According to the folks over at SearchSecurity.com, here is what they’ve been saying since 2002:

“A counterfeit detector pen is a felt tip pen containing an iodine solution that can be used to help identify computer-generated counterfeit bills. According to U.S. Secret Service data, “funny money” generated by criminals using computers and ordinary printers accounted for only one-half of 1 percent of the counterfeit bills confiscated in 1995. By the year 2000, that figure had risen to 45 percent and is still going up. Detector pens, although not fool-proof, are an effective way to identify computer-generated counterfeit bills because the iodine solution in a detector pen reacts with starch, which is commonly found in the wood-based copy paper used by most printers. Detection pens are easy to use and require no training. A clerk at a cash register simply uses their counterfeit detector pen to put a small mark on the bill. If the bill is counterfeit and the paper is wood-based, the iodine in the pen solution will react with the starch and leave a dark brown or black mark. If the bill is authentic and the paper is fiber-based, there won’t be any starch and the pen will not leave a mark. Typically, a counterfeit detector pen costs about $5.00 and can be used to screen up to 3,000 bills. Counterfeit detector pens can be used for any thread-based paper currency.”

The website HowStuffWorks.com has this to add:

“The counterfeit detector pen is extremely simple. It contains an iodine solution that reacts with the starch in wood-based paper to create a black stain. When the solution is applied to the fiber-based paper used in real bills, no discoloration occurs. The pen does nothing but detect bills printed on normal copier paper instead of the fine papers used by the U.S. Treasury.”

So basically, if there is any starch within (or upon) a note, this iodine pen will detect it. Does it mean the currency is bogus? Not by a long shot – aye, there’s the rub! (Pun intended.) For instance, legitimate bills that pick up starch from external sources will cause the marking to turn to black. What happens if a bill that is left in a shirt or pants pocket goes through a rinse cycle that contains starch? Or even simpler, what happens if starch is sprayed onto the money? Although the instances where currency notes and external starch sources accidentally intercede are probably very rare, it is a sure fire means of falsifying the iodine pen. When James Randi looked into the iodine pen a while back, he had some choice comments. Among them:

“The U.S. Secret Service has the awesome responsibility, among other things, of protecting us from counterfeit currency. They tell us that there is more bogus money in circulation now, than at any previous period in history. This is something we should all be concerned about, right? I contacted a U.S. Secret Service inspector and asked his official opinion about this device. “Does it (the iodine pen) work as advertised?” I asked him. “It is not dependable,” he responded, after referring to a handy manual. “Not dependable, like, 100 percent not dependable?” I asked. “You might say that,” he said. You see, Federal officials never use “yes” or “no” to answer any question professionally. “

It is noteworthy that there is almost universal acceptance of the legitimacy of the iodine pen’s ability to sniff out (our mark out) fake bills. Besides what Randi has written, there is hardly any other criticism of the innate flawed concept of this pen. The pen is universally used, many of us have had first hand experience with it (as the bearer or checker of the note), and we have accepted its validity without a second thought. Despite the numerous means that the government has implemented to protect us from actual counterfeit notes, and the fact that the manufacturer of the notes is constantly making design improvements and new security features, we citizens seem to take greater comfort and trust in a smear of iodine. In a way, investing in the power of the pen to reveal counterfeiting is a kind of argument from authority, and for many people, that is a logical fallacy that they can not resist. The iodine pen issue is an excellent example of how easily and readily a culture or society will embrace the most simple ideas, uncritically. It is no wonder that Randi has made this a fixture as a part of his lectures.

Well, in the end, once my bill was marked with the iodine pen, it retained its amber tint to the satisfaction of the 17 year old cashier. Just to see if he was more on the ball than I gave him credit for, I said to him “You know, those pens don’t really work.” He replied “uh-huh” and kind of gave me a blank stare, and that was it. No questioning of my comment. No curiosity as to why I would make such a comment. No interest whatsoever. It is exactly the same reaction we, as a society, collectively have when the makers ofthe iodine pen tell us that their product works.

16 comments to Change For A Hundred?

I spent multiple years managing teenagers and twenty-somethings in retail, and at the time I had no clue that the pen was bogus, and we insisted that every large bill be marked. One time I was counting down the register and found a $20 bill that was photocopied on printer paper and sent through the laundry or something. I mean, it was ridiculous, not even quite the same size as an actual bill. It might as well have had a cartoon moose in the center. I showed it to the cashier and asked her what she was smoking. She shrugged and said it was fishy, but they were only supposed to mark the large bills so she didn’t bother.

Hah, interesting, I’d never heard of that kind of thing. Maybe it’s that I come from a place where the pen isn’t used, but personally I’d put much more trust in the watermark and embedded strip. Seems to me that it would be more likely to produce false positives than to actually reveal fakes. Wouldn’t a fake note printed on regular paper be fairly obvious even without a pen?

Unfortunately all too many retail stores use these stupid pens. Between all the security features in the currency, anyone with decent eyesight and five minutes worth of education on what to look for can spot a genuine bill. But, too many people, including store managers, rely on the silly pens.

For Rebecca:
Did you ever wonder if the “420″ fans realize
they’re getting high at a time equivalent to Adolf Hitler’s birth month and day ?

When I was on vacation a few weeks ago, I noticed U.S. $1 bills with famous people’s faces in place of Washington’s for sale in a gift shop. (I don’t remember the exact cost, but I think they were $2 or $3 each.) The sign said that they were valid U.S. currency. I looked carefully through the glass and noticed that the new portraits were actually stickers cut out and placed precisely on the bills. Therefore, since the stickers could be removed, the bills were not technically defaced.

I wonder how the typical cashier with a counterfeit-detection pen would react to, say, a real “hunj” with Sly Stallone’s face in the center. (I think it would have to be either a one or a hundred, since the other denominations do not have a nice oval frame around their portraits.)

The pens have a high false positive rate as you argue, but what of their false negative rate. That is all the retailer really cares about. If they misidentify good money as bad, it does them little harm.

Sometimes when I am at a store, I am tempted to ask to borrow the clerk’s counterfeit detecting pen and check all the paper money he or she is giving me with my change.
Or maybe what I really need is a pen of my own that looks like the real thing, but which is rigged to give a positive or negative result at will, so I can randomly reject some of the change I get, just to be annoying and difficult.

Here in Canada we use black lights to reveal phosphors hidden in large bills. Seems a bit more foolproof than the iodine pens (which I have never heard of till today). Canadian money is (and has been for a while) years ahead of American money.

Also, it’s ridiculous that a $100 bill and a $1 bill look so much alike, why not use different colours?

What are store policies when they suspect a counterfeit bill? According to the treasury department (http://www.ustreas.gov/offices/domestic-finance/acd/if-you-suspect.shtml), they are to call the authorities, keep the bill and try to detain the passer. With the possibility of false positives, this raises some real legal issues for the store as well as for their customer losing the bill they just tried to buy a stick of gum with.

Thank you for the post – I had never thought about how that pen works (or does not work).

If someone were evil, or just wanted to pull a nasty April Fools joke, all they would have to do is exchange a 50 or 100 sprayed with ye olde ironing starch with someone they did not really care for, and then watch the fun!

(BTW – I am neither evil nor a proponent of nasty 4/1 jokes, nor am I suggesting someone do it…. but they could.)

Slightly off topic, but regarding security of financial transactions, it’s totally worth reading the saga from the guy at Zug who was so ticked off about people accepting ‘bogus’ credit card signatures that he started a campaign of seeing exactly how far he could go before the signature would be rejected (heiroglyphics was just one accepted sig). I think you’ll be very surprised. But perhaps not.

Great examination of a topic where simplicity has replaced common sense. Currently I am a restaurant manager and the upper management has instituted the use of these pens for checking large currency, they pass most fakes. As Evan was saying there are a large number of features to guarantee that the bill is genuine, the best is the feel of the bill, it has raised printing that I have never seen, yet ,in a counterfeit. So far I have seen counterfeiting including the water mark, security strip, and color changing ink.

Oh the joys of working in retail. I’ve been the teenager behind the counter for many years. Not that I’m in college though I suppose I’m just that guy behind the counter. And Evan you can’t be too hard on him, I mean he’s probably just waiting to go home and some guy starts asking him weird questions, which happens more than you might think in retails, anyways this is beside the point.

One of my first experiences checking a bill to see if it was real was horrible. I had the pen but had not been told exactly how it worked yet. I had somebody paying with a large bill and I marked the bill, and the ink turned amber. It could have turned purple with red edging and not mattered, I didn’t know what each color meant. So using my critical thinking skills I grabbed a piece of paper from my register and marked that. Assuming that whatever color the paper would turn would be the color marking a fake. Well turns out the paper I use using had a high fiber content and no starch whatsoever. Needless to say when I informed the customer of my little experiment they weren’t too happy.

This was about five years ago and I haven’t used a pen test since. In fact I’ve been informed from a couple of sources that what counterfeiters do is wash and reprint five dollar bills rendering the pen test absolutely moot.

I’m with Johnny_eh about the colours. Seriously! The US currency has got to be the most copied in the world. Get another colour on there and change it once in a while…oh yeah and also get rid of the ones and replace them with coins.